Middling success in Israel on employing its people, report shows

With a lack of natural resources, Israelis are wont to say that their country’s greatest resources is its people. But how true is that?

Somewhat, according to the World Economic Forum. In its just issued Human Capital Report, the WEF said that Israel did a fairly good job of taking advantage of its population’s smarts, and provided opportunities for education to teach various age groups skills enabling them to work at higher paying jobs and participate in the high-tech economy.

Using metrics that measure participation at different age levels and from various economic backgrounds, according to the WEF’s methodology, the report aims “to assess the outcome of past and present investments in human capital and offer insight into what a country’s talent base will look like in the future.”

Overall, Israel ranks 29^th out of 128 countries in the report, which measures the number of people in the educational system among all age groups, the perceived quality of schools and programs (as rated by experts and by top business officials in the country), what fields of study students are pursuing, and the level of economic participation (labor force numbers, unemployment and underemployment, etc.), and other issues.

Israel’s ranking was good enough to put it far ahead of any other Middle Eastern country – the next best regional performer was the United Arab Emirates, which came in 54^th overall. But it was behind most of Europe – both Western and Eastern, performing better than Italy, Portugal, Spain, and Greece, among others, but not as well as Latvia, Lithuania, and Ireland.

Israel, according to the report, has done a good job in ensuring that higher education – including advance post-graduate education – is available to all who seek it.

“Israel benefits from a high tertiary attainment rate amongst its 25–54 age group core working population, resulting in a significant high-skilled employment share of 49.7% (4th overall) and a relative perceived ease of finding skilled employees,” the report said. “While among the lowest in the region, the country’s rate of unemployment for the 15–24 age group is at 11% and its share of youth not in employment, education or training is also relatively high, at 15.7%”

While the WEF report did not break down the workforce participation rates by population group, numerous Israeli studies have – and all of them indicate that the relatively poor workforce participation rates among Israelis is due to the large numbers of working age Arab females and ultra-Orthodox men who either are not employed or work “off the books” in Israel’s substantial underground economy (according to some estimates, as much as 20% of total economic activity in Israel goes unreported).

A 2011 report by the Jerusalem Institute for Israel Studies, for example, showed that the rate of participation in the workforce in Jerusalem, which has a substantial Arab and ultra-Orthodox population, was 46%, lower than the participation rate in Haifa (59%) and Tel Aviv (65%).

Breaking down the statistics by religiosity, workforce rates among secular, traditional, and observant (“knitted kippah”) Jerusalemites was between 64% and 68%, while for the country as a whole the rates were between 66% and 72%. For ultra-Orthodox Israelis, those numbers were 44% and 51% respectively.

If it seeks to continue to thrive economically, the report says, Israel – and all other countries – should be rethinking its strategy and philosophy on work, education, and the connection between them.

“Talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century,” the report said.

“Addressing the challenges of the current system requires a fundamental and holistic rethinking of what it means to learn, to work and to fulfill one’s potential as an individual, of how companies should plan for and invest in talent, of how education is delivered and what its substance and timing should be, and of how governments should be addressing not just today’s short-term concerns but also planning now for the needs of tomorrow’s generations.”